SAP Watch

Nov 7 2008   11:52AM GMT

No Business“Buy”Design, no problem?

JackDanahy Jack Danahy Profile: JackDanahy

SaaS ERP — with its irresistible pay-as-you-go model and less-costly deployment — is well positioned for the current economy, most analysts agree.

 So is SAP missing out on big chances to sell Business ByDesign?

In a week when there’s been no shortage of digs on SAP’s debuted, then-delayed SaaS ERP, and attempts to sway SAP customers to other vendors, it’s tempting to think so. NetSuite is trying to lure SAP customers to its own SaaS ERP offering with discounts and freebies. Salesforce.com CEO Marc Benioff took aim at SAP during Salesforce.com’s annual Dreamforce conference, saying that SAP — along with Microsoft and Oracle — were too late to the game.

Analysts say that NetSuite’s 50% off offer to SAP customers is less likely to appeal to the R/3 customers it’s targeted at, than to enterprise-size SAP customers who were thinking of deploying SaaS ERP in a smaller division or subsidiary. Those are potential, new SMB customer wins SAP could be missing out on.  

But there’s also another view emerging.

The Wall Street Journal, in its Business Technology blog, took aim this week at the claim that online software is recession proof, citing NetSuite’s slightly lowered guidance for the remainder of the year, as well Benioff’s answer on how the economy had affected Salesforce.com — that these were difficult and unusual times, but Salesforce.com was in a position of strength.

And evidence is starting to emerge that IT budgets are, at best, uncertain. A recent story on our sister-site SearchCIO.com, centered on a Forrester Research survey on how IT is riding out the recession, revealed the approach to IT spending right now is somewhat unclear.

While the report said that “more than half of the IT executives said they are not cutting budgets and do not have plans to make cuts for 2009,” it also added that “the number of CIOs responding thus far is roughly a third of what Forrester normally sees at this point in a survey…suggesting deep uncertainty about what is going to happen.”

Will SaaS vendors just ride out the recession better than on-premise vendors, or will they really get a significant boost?

And is SAP missing out on a bunch of chances to sell its SaaS ERP, or, is it no big deal? Is the economy actually good, or at least neutral, for Business ByDesign?

Courtney Bjorlin, News Editor

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